Community and industry leaders often ask, “What is the economic impact of….”
- wind energy?
- a new business?
- a large event?
Take, for example, the Republican National Convention to be held in Cleveland in July. Organizers estimate that the event will draw about 50,000 visitors generating a direct economic impact of around $200 million and providing a significant boost to the state and local economy. Understanding the economic impact is essential in gaining local support for the event. It is also necessary for informing decisions regarding community investments in infrastructure, safety, or other support activities for the event.
Van Wert County, Ohio provides another example of economic impact analysis in action. Community leaders were preparing to undergo a fundraising campaign to raise $2M to develop and market a new industrial site. To make the pitch, they hoped to estimate the campaign’s return on investment in terms of jobs, wages, and spending and tax revenues benefitting the community. Partnering with Extension, the economic impact to the local economy was studied and the findings communicated. This step played a critical role in successfully raising the funds needed to develop and market the site.
A contribution analysis for a private sector organization is another way this tool can be used. In 2012, Extension Community Development conducted an analysis involving the Ohio Ethanol Industry to estimate the economic contribution of that sector in Ohio. The analysis considered both the operations and construction of six ethanol plants to estimate total output, employment and income impacts on the state. The information was helpful to the industry in planning for future investment.
The Extension Community Development Economic Impact Analysis (EIA) Program utilizes IMPLAN, an input-output modeling program, to generate customized analyses for both the public and private sectors. Reports range from a snapshot of the current economy to more extensive information on the effects that an industry change will have on a designated study area. Reports are based on clientele needs. Please visit our EIA Program page to learn more.
(Submitted by Nancy Bowen, Associate Professor and Extension Field Specialist, Community Economics)